Exam 8: Behavioral Economics

When Lucian starts his new job, he is given the option to contribute to his retirement fund, which the company will match up to 5 percent of his base salary. Lucian knows he can afford to contribute to his retirement fund; he only needs to file a form to activate the contributions and matching. According to prospect theory, if Lucian is typical in his behavior, we would expect him to

So-called precommitments are effective ways of fighting

(Consider This) According to the piece "Wannamaker's Lament,"

The anchoring effect suggests that when people are made to think of large abstract numbers before they go shopping, many of them will subsequently be willing to pay higher prices for stuff.

Josh will receive a salary of $300,000 next year. According to prospect theory,

"Loss aversion" helps explain why people buy insurance policies with lower deductibles even though the policies are more expensive.

Many economists believe that the neoclassical theories of human behavior and the insights being accumulated in behavioral economics are basically

Which of the following supermarket strategies to increase sales would be most consistent with a neoclassical economics (versus behavioral economics) approach?

Neoclassical economics assumes the following as major motivators of decisions and actions, except

In developing prospect theory, which of the following did behavioral economists not discover about people's reaction to goods and bads?

Edgar and Felicity are players in an ultimatum game for $100, where Felicity is the proposer and Edgar is the responder. Suppose that Felicity proposes that she receive $95, while Edgar receives only $5. How would behavioral economists expect Edgar to respond?

Which of the following is a key difference between the dictator game and the ultimatum game?

One consequence of the confirmation bias is that many people believe that they could "beat the (stock) market."

Behavioral economics demonstrates that the threat of rejection makes people less likely to engage in transactions.

A key difference between neoclassical economics and behavioral economics is that in behavioral economics, context affects preferences.

Behavioral economics hopes to eventually fully replace the neoclassical economic model.

Neoclassical and behavioral economics are generally viewed as complementary.

When people react to (or perceive) identical situations differently in different contexts, we call that the

According to behavioral economists, self-control problems

Which of the following statements about human-brain activity is true?